Competencia Francesa alt

This post is also available in: esEspañol

The French competition authority has fined the power tool manufacturer Stihl €7 million for placing a de facto ban on its authorized distributors, prohibiting them from selling its goods online by requiring them to hand-deliver orders.

The authority started its investigation following a report by the French Bureau of Competition, Consumer Affairs, and Fraud Control setting out the results of a survey carried out in the distribution sector for garden products and machinery. On examining the company’s distribution system, the competition authority found that, between 2006 and 2017, Stihl’s agreements with its distributors had included prohibitions on selling certain products, such as power saws, brush cutters and weed trimmers, and electric pruning shears on the internet.

This case is relevant in that the authority did not question Stihl’s use of a selective distribution system; according to the decision, the type of goods the company sells warranted putting in place assistance and advisory services for consumers to preserve quality and ensure proper use, as well as to protect its brand image.

However, Stihl implemented a de facto restriction of sales of its products on its distributors’ websites by requiring hand-delivery, i.e., it forced buyers to go to the store to pick up their purchases or forced its distributors to deliver the products to the buyers’ homes. Considering this hand-delivery requirement highly detrimental to competition, the authority considered this restraint to be restriction by object.

It also noted that the restriction was not justified, given that no national or EU rule requires hand-delivery of goods or demonstration of product use. Thus, by establishing this restriction, any benefits arising from selling on the internet were lost, in particular the possibility that competition between distributors could result in lower prices.

In addition to the fine of €7 million, the authority has given Stihl three months to change its selective distribution agreements, so that they clearly stipulate that distributors can sell all products online without requiring hand-delivery to the buyer.

This is the first time that the French authority has issued a decision concerning selective distribution and restraint of online sales since the CJEU’s important Coty judgment of December 6, 2017 (we have already commented on the advocate general’s opinion here and on the judgment here), which clarified the EU framework that applies to selective distribution on the internet and in particular to the distribution of luxury goods through a marketplace.

Access the decision by the French authority and the press release (in French) here and here.

This post is also available in: esEspañol

Autores:

Asociada

11 artículos



maria.lopezridruejo@cuatrecasas.com

Asociado

12 artículos



alexandre.picon@cuatrecasas.com

Leave a Reply

Your email address will not be published. Required fields are marked *